“Gimme Shelter” with Daniel Gehman: Been Down So Long
- Mar 31, 2009
What a crazy time to be alive. So many of us have been waiting through this difficult “economic circumstance” for signs that things might be getting a little better. We can’t help but continue to scour the horizon for the little glimpse to encourage us. I think it was Confucius who said, “You cannot step twice into the same river.” For those of us in the housing business, I think this is particularly true. “When will things hit bottom? Will we know it when they do? What will be the signs? How will we know?”
I watch the industry news as closely as anyone. An optimist at heart, I watch for any indicator that can bring some hope to what has now been a long, dry period. My prediction is that there will not be any single, strong sign that things are getting back to “normal.” As a wise commentator once said, “Normal is just a setting on your dryer.”
So what do we look for? Like you, I long for the signs that something is afoot—something that will restore hope, and promise that business will pick up and we will all benefit from some new energy that will breathe life into our daily existence.
The very, very, good news for me is that I have seen a couple of tiny glimpses of what it might be. Thank goodness for the creative, inventive energies of the talented folks in our industry. Everybody wants to succeed, and all around me there are little sparks of peers who desire to usher in a new period of work, satisfaction and prosperity.
Today, as I routinely do on Sundays, I perused the business section of my local paper. I always check the sales figures for homes. In my zip code, this is the first time in a dreadfully long time that the median sales price for singe-family residences were up—albeit only by a couple of percentage points. Still and all, this generates a little “warm fuzzy” for me as an observer. It appears we are entering the third or so month in a row where sales are above the year-ago period.
This can mean a couple of things. Number one, prices have fallen to the extent that the market now seems primed for entry by buyers who have waited patiently for “capitulation,” or for the median single-family home price to be attractive enough for them to cross their fingers and jump into the market. Increasing sales indicate that perhaps we have dug to the bottom of the hole, at least to the extent that new buyers can get back into the market. It is particularly encouraging to see the return of sales to the buyers who are seeking shelter, and not just a “flip” potential or an investment.
Maybe the stimulus package, with its modest benefit for first time homebuyers, is having the desired effect. That’s a lovely thought to contemplate. As these novices enter the market, they may well have the effect of stabilizing it—which would be a great thing.
One story in particular grabbed my attention. A small local bank in my region, which has historically trod the largely conservative path of making loans to parties it felt could actually service them, has re-entered the residential mortgage market after bowing out in 2007. The article I read indicated the leaders of this establishment felt there was an adequate market segment of folks with decent credit who could now find a home to call their own. Wonderful. This firm even anticipates hiring a few people to help write these loans. So, in other words, the money originates locally, the sales occur locally, and the benefit to the employment picture is local as well.
Could we actually be scraping bottom? Little by little, the tiny sprouts of renewed activity seem to be appearing. Thank goodness. To quote George Harrison, “It’s been a long, cold, lonely winter.” Spring is here. The ice is slowly melting. A foundation is being formed, on which to move forward with a new paradigm, a return to sanity, and a return to satisfaction for those of us who seek to house the incredible pent-up demand for shelter that the pundits continue to tell me exists.
Call me Pollyanna, but my eyes are fixed on a brighter tomorrow. “Here comes the sun.” Do you believe it?
(Daniel Gehman is principal at Thomas Cox Architects. He can be reached at DanielG@tca-arch.com)